ARK Invest Research Director: Hackers' Cost Is a Hidden Transaction Tax Ultimately Paid by Users

Odaily reports: Lorenzo Valente, Digital Asset Research Director at ARK Invest, posted that cryptocurrency hacks effectively constitute a hidden transaction tax and cost of storing value, similar to merchandise theft in the retail industry, with the related losses ultimately passed on to users through cost-based pricing. Every hack weakens the competitiveness of crypto networks.

Data shows that since 2018, the crypto industry has lost an average of 24 basis points (0.24%) of its total market capitalization each year to hacks, while the U.S. banking system's deposit losses from fraud amount to only 1.7 basis points (0.017%) — a difference of about 14 times.